tv Fast Money Halftime Report CNBC August 3, 2012 12:00pm-1:00pm EDT
place to get this economy going again, create jobs again, get higher incomes again. let me tell you what they are. number one, we're going to take advantage of energy in this country, oil, gas, coal. nuclear, renewables. and when i say take advantage of our energy, let me tell you the goal, by the end of my second term, by the end of my second term -- [ cheers and applause ] you got that, did you? yeah. by the end of my second term, north america will be energy-independent. we will not need to buy any oil for the middle east or from venezuela. number two, we're going to make sure that the american workers of today and tomorrow have the skills to succeed in america. that means better schools. better job training programs,
but we cannot continue to allow our schools to perform at the bottom of the world, we have to bring our schools to be the best in the world. i can do it, we did it in my state. we can be competitive and give our kids the future they need with great schools. number three, we've got to have trade that works for america. that means if people cheat like china has cheated, we don't let them keep doing that and we also open up new markets, so we can sell our products to new places. and in particular, i want to open up latin america. >> we've been listening to governor romney speak about today's jobs report and of course the president is making comments as well today. on the latest employment picture. let's listen to president obama make his comments now. >> well, it is great to see all of you. and i hope you guys are having a wonderful summer. i am joined here today by moms and dads, husbands and wives,
middle class americans who work hard every single day to provide for their families. and like most americans, they work hard and they don't ask for much. they do expect, however, their hard work is going to pay off. they want to know that if they put in enough effort, if they are acting responsibly, then they can afford to pay the bills. that they can afford to own a home that they call their own. that they can afford to secure their retirement and most of all, that they can afford to give their kids greater opportunity. that they can, their children and grandchildren can achieve things that they didn't even imagine. every single decision that i make is focused on giving them that chance. because if we want to keep moving this country forward, these are the folks who are going to get us there. this morning we learned that our
businesses created 172,000 new jobs in the month of july. that means that we've now created 4.5 million new jobs over the last 29 months. and 1.1 million new jobs so far this year. those are our neighbors and family members finding work. and the security that comes with work. but let's acknowledge, we've still got too many folks out there who are looking for work. we've got more work to do on their behalf. not only to reclaim all the jobs that were lost during the recession, but also to reclaim the kind of financial security that too many americans have felt was slipping away from them for too long. and we knew when i started in this job, that this was going it take some time. we haven't had to come back from an economic crisis this deep or this painful since the 1930s.
but we also knew that if we were persistent, if we kept at it and kept working, that we'd gradually get to where we need to be. here's the thing -- we are not going to get there, we're not going to get to where we need to be if we go back to the policies that helped to create this mess in the first place. and the last thing that we should be doing, is asking middle class families who are still struggling to recover from this recession, to pay more in taxes. rebuilding a strong economy begins with rebuilding our middle class. and what we should do right now is give middle class families and small business owners a guarantee that their taxes will not go up next year. when families have the security of knowing that their taxes won't go up, they're more likely to spend -- >> we've been listening as you can see president obama making
comments there about today's jobs report. also heard from governor romney. let's get out to our john harwood now in washington. and john, it's interesting how this is being shaped today. governor romney clearly focusing on the 8.3 tick in the unemployment rate and the president focusing on what needs to be done here and now to improve the jobs picture. saying we still have too many people looking for work. but you certainly get an idea of how this is going to be shaped going forward. >> no question, they're both saying things that are true. that are just different facets of this economic puzzle. mitt romney is making the point that this is a weak and slow recovery. there are too many americans out of work. the unemployment rate is too high. that's all correct. president obama is making the point that we're headed in the right direction -- that financial recoveries from financial crises are slower than others. and he's trying to justify his policies and saying that if congress would pass his jobs proposals, we'll get even stronger growth. we're going to hear this argument, scott, all the way through election day, the lines are pretty clearly drawn.
this is good news for the president, considering how low the expectations bar was set by the last couple of months. >> to hear romney tell it, you would almost think that the jobs report was disappointing this morning. and i guess he does have on his side the fact that tomorrow morning in all the papers, it's going to say well jobs were added, 8.3%. and that's going to be splashed across newspapers all over this country. >> well, it was disappointing for his political strategist. because the worst those jobs numbers are, the better it is for mitt romney. but all republicans today are focusing on the things that are legitimately bad about this number. it is not enough to bring down the unemployment rate, even if it's far above what we had last month and above consensus forecasts. and republicans are going to make the case that where wr they in charge, we'd have a faster recovery. >> john harwood, thanks so much in washington, continue to cover that story. it's halftime on wall street, where today's jobs report is being cheered on the street. stocks are soar on the
better-than-expected jobs report. let's get to the numbers on wall street. plenty of green on the street, following the major averages, off to the races today, the s&p 500 up better than 2%. as is the nasdaq. and the dow jones industrial average sitting just about there with a gain of 250 points. best gain for the dow in about a month. there's the commodity space today, with crude oil rising by nearly 5%. certainly the euro continues to play a big role in all of this. the dollar weakening versus the euro and that lift giving an overall rise to the markets. which we by the way, are covering from all angles over the next hour. and we begin with our traders, steven weiss, when did you see today and how does it shape your view going forward? >> well the jobs number is one thing. if you get to the detail as steve i'm sure will talk about, it was kind of weak. about you what really drove the market is what happened in europe. so there's a reconsideration of what was actually said yesterday by draghi and most importantly, the spanish prime minister came out and said, if you read through the lines we'll take a
bailout. so the european market was up big. that led to futures being up big, ratification by jobs number, you're off to the races. >> so joe it took 24 hours for the market to come to grips perhaps with what mr. draghi said yesterday. yesterday, that the headline was really all talk, no action. now it's -- okay, maybe they're going to act? >> well and steve's going to point it out. i think you ought to look at the european credit markets to see the appreciation for potentially what could come. you're seeing in spain in the 2's and the 5's and you're seeing it in portugal and italy, the yields are falling there. to get real granular here for a second and go back a couple of weeks, one of the reasons why i've suspecteded other the last couple of weeks that the market is going to rally. and adding to my longs, is that growth managers are underperforming. goldman sachs pointed it out in a weekend note, i thought it was excellent. if when you look at the performance of a chipotle or a starbucks, these high-flying growth names that managers have owned, they're underperforming the benchmark. whatever the reasons may be why this market continues to move higher right now, scott, if
you're a money manager and it's moving higher, you've got to ask the question later and be in the market. so i think there really is a little bit of a clas for performance going on here, chase for performance. >> steve liesman is here with us and steve, i think it's interesting that certainly the market seems to be feeling much better about draghi than they were yesterday. but there were some participants in the market yesterday who are active. >> i want to know the guy who has the model that links trading the dow and the s&p to the spanish two-year. because that's the model to follow. if you saw what happened this morning, what was it, a, i don't know if you saw it, 60-bit decline in the spanish two-year. if that's not a reconsideration. so draghi said, we're going to buy on the two-year. and by the way you had a widening on the spread in spain. have you ever pitched, why am i talking about spanish bonds? >> that's the reality of where we are. >> what i heard by the way is that traders are telling me larry fink was down on the trading floor --
>> blackrock. >> buy the weakness on the draghi comments on the market because he thinks it's a very big deal. >> so blackrock was bullish? >> while the market was selling it off as a huge disappointment. he was like no, it's a big deal many it's a big change of policy. so he's apparently a believer in that. that's my understanding. >> let's also mention, i mean the best that i can remember, larry fink has been bullish on stocks for a while. i mean he has made that call even on cnbc. at times that it was, it was the time to go into equities and go into equities heavily. now that was several months ago. i don't remember what the interim is. but the point is that he saw opportunity yesterday where others were a little more bearish. >> here's the question that needs to be put on the floor here. for every trader, every investor out there. do you buy or do you sell sovereign weakness? there are guys who are retired today, because they bet against the notion of sovereign default. now that was not the right play with greece. the question is, is it now the -- it was the right play in
italy in the 1990s. is it the right play now with spain and with italy? does italy offer opportunity or more broadly, does the united states offer opportunity because you believe that the sovereigns will get their act together? >> let's go down to steve grasso on the floor of the new york stock exchange. steve, putting into perspective how you feel about the market, look, steve just told you how a big market participant, that being larry fink felt yesterday. and how the market clearly is reacting today. >> you know, i think everyone is on the same page here. for us it's about europe. you know, if you look at the s&p and the dow, we're doing a little bit better today. but it's still about europe. so if europe is quote-unquote stable for the next 24, 48 hours and that's how, that's the short increments that we are looking at it by the way -- >> that's a sad reality of where we are. >> it truly is, if you look at the roller coaster yesterday in the s&p, we touched down at the 100-day, which is 1359. and everyone thought we were actually going to break much lower.
so if you look at it in those terms, today we're back to where it was, and i'm going to say late july as if it was a year ago. we're back to this 1391 level and now we're above it. it really puts the recent highs within eyeshot of people looking at 1422. i don't think we're out of the woods yet. we are still headline-dependant. if europe looks good over the week, we can continue to move higher. but for me, it's all about bernanke. you have to look at jackson hole. he's kept the bernanke bid back in this market. until september. >> yeah if you look at the s&p 500 is at session highs right now. big moves in the market today, coming from energy, industrials and financials. let's get to mike murphy, back tanned, well rested from vacation and active in the market today, murph? >> absolutely. coming into this morning's jobs report we were looking at it as a win-win. if you got a bad print on the nonfarm number, bernanke qe 3 talk would come up and probably
push the market higher and if you got a decent print like you got this morning, we didn't expect a rally like this. clearly this is fuelled by europe also. but i think adding on to steve grasso's point, with the market up here now at 1393 on the s&p, i think a lot of technicians will be looking at this and saying the market is coming out of a down trend, moving to an uptrend. we could take out the recent highs. we're long here and going to continue adding. >> deceive, we sit and talk about draghi and the ecb. what does today's jobs number do to the debate over the fed and what bernanke views in his prism? >> that porridge is not hot enough or cold enough? that's the problem with it. i don't think you draw too many conclusions from this jobs report. i think it does give credence to the idea that we're not falling off a cliff. that there were not heading to a second recession. if you were on that trade it's probably time, this thing ruins that trade for you as you can see from the numbers today. i'm just getting a lots of mixed signals about what it means for fed policy.
goldman saying it morning that it's not a game-changer for policy that they're on track, other guys say it takes it off the table it really makes that september report very decisive. >> steve, steve, i know we have to run quick. but in when you're fielding phone calls today from market participants, are they asking you more about the fed, or more about europe or more about fiscal cliff? or there any type of consensus? >> i think we've been there, done that on europe right now. think people who have made their conclusions on europe. let's emphasize the notion that there's a long way to go before the ecb gets involved on the efsf program. i think that's the broad conclusion. on the jobs report, a lot of people are still drilling down into the jobs report trying to understand what does mean if you drill down through the numbers. it looks like it's broad-based employment, but nothing exciting inside it. it doesn't mean we're off to the races. it means we can put a period on the idea of going down further.
but it doesn't mean we're off to the races. >> steve weiss finish the conversation. if you believe the economy is going to start to improve, if you believe that draghi is going to come in, if you believe that bernanke has put a floor under stocks, do you look at today's rally and do you buy into the market right here, right now? >> i took some exposure out. most long-term players i talked to underinvested so they're slightly net long. i have friends who manage large sums of uponny, larry fink, while he's not a friend, he was at these meetings. you had merkel ministers meet privately with these people. another friend met with the finance minister of spain. they've got confidence that something is going to happen with europe. that's not their issue. their issue is the slowdown in the european economy post the solution. >> everybody is focused on u.s.-centric names, joe terra nova. >> and i have been one of those
that has done that i will tell you in the next couple of weeks you could look at the industrials and energy names, doebts rule out the people's bank of china or the ecb acting before jackson hole in a couple of weeks with another monetary policy. >> is that inside information, joe, or just a feeling there? >> a good feeling. >> you got a red phone? >> i like it. >> he stole the one -- >> that could be big. i mean if the pboc acts and comes along -- all of this really has a bearing on what bernanke does. if he feels as if the european central bank is going to do its part and the bboc does his part, then maybe he doesn't feel he has to act and i'm curious about whether or not the market is up because they feel the economy is doing better. or because the unemployment rate is higher and they think the fed may be coming in. >> that's the key question. steve, thanks as always. another take on the jobs report withdrew m ampmatus and we're continuing to follow the fallout from the knight capital trading glitches that sent that stock
tumbling yesterday. has the company fighting for its life. michael lebranch who once ran the largest specialist firm on the new york stock exchange joins us after the break on what it means for the markets and certainly you the investor. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. it's something you're born with. and inspires the things you choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology.
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up, almost 30% on news that the company has obtained a line of credit. we're joined by kayla taush with the latest. >> on the hook for $440 wrought by wednesday's errant trades, on monday when the trades settle. now wall street wants create a soft landing for the company. but big questions remain about the status of knight's funding sources. both day to day and long-term. knight is in the market trying to pull together financing to back trades, that would be a huge vote of confidence for the firm. not to say that's still in the business, though processing some smaller trades. i'm looking at one million shares of spider etf and 500 shares of nokia for a few. in the meantime, the biggest retail broker are not doing business with knight, even though the firm is open for business. here's the latest. e-trade, vanguard and scotttrade still rerouding their trades away from knight, fidelity not
trading through knight. although the company said it would not comment directly on their relationships with other firms. td ameritrade said the company continues to take a day-by-day approach with the business and as long as knight remains in good standing quote we will continue working with them. industry executives say with the stock price holding up for the most part, knight has bought some time over the weekend which is more likely from a deal perspective, given how much due diligence will need to be done to do a deal here, scott. i think it goes without saying people have confidence in knight that it will be able to get a deal done and that's the prime difference between this situation and perhaps what happened at mf global. which in the beginning we saw the steep slide, a lot of comparisons were drawn, but i don't think that's correct at all. >> we'll see what develops over the weekend. meantime the knight trading debacle has intensified the debate over how much technology is good for the markets and investors, michael lebranch, principal at leebranch advisers,
joins us here on set. great to have you. to talk about what's happening with knight. what's your reaction to all of this? >> well, i think that it's really a different situation than it used to be. we used to be able to stop these kind of problems, the mistakes, they're not new to the market. the consequences are different now. so bear stearns once had a huge program, like what we used to call fat finger. we probably saved them $1 billion one day just by slowing the trading down. >> what does it say about the current structure of our markets, when a software glitch can cause the potential demise of a firm on wall street? >> well, i think we really need to just think about the market structure and what can we do to make it better. what can we do to make people feel more comfortable with it. in my mind, it's like a fast car with no brakes. there's no way to stop things from going wrong. and if we could maybe slow things down in certain situations, that would make big difference. >> is there too much technology
at work? and your view is different than most, right? you've experienced this probably more than most people have. you had the leading specialist firm on wall street, the landscape changed dramatically. you've since obviously sold that. but you saw the industry changing and changing dramatically. for the better or for the worse? >> well first of all, there's no putting the genie back in the bottle. where we are is where we're going to go. we're going to stay with technology. and the question is how do we get people more comfortable with the market the way it is. i thought the specialists did a great job in certain situations like the one, i think we would have done a lot better job in mitigating the losses for knight, had we been there. but we're not there. now we need to figure out what can we do to make sure that the market as it goes forward is better. >> i'm going out on a limb and saying you may have money invested in the market personally. if you were an individual investor, would you have confidence in our markets? >> yes.
i would. i mean i think that really doesn't matter how fast you buy or sell something. if you're calling your broker and you say you want to buy a stock because you think it's a good investment, it doesn't matter if you buy it in .1 of a second, .01 of a second, one millisecond. the whole idea about buy and hold is dead, i don't believe that i think you make a good investment, that's what you're there for. >> steve weiss? >> i agree. if you're an investor, chances are you're trading electrically yourself. you have the confidence, and your trades have been secured. it's the people that really aren't involved in the market day to day that probably react more to the headlines. >> but it's hard not to, right, michael? look if you take the flash crash of you know, a couple of years ago. the facebook ipo debacle. the bats ipo debacle and now this. it cannot be good for the psyche of the individual and the smaller investor, who sees all this and wonders, what the heck is going on. why am i hearing about this all the time? >> it isn't good for everybody.
but i think that what we need to do is figure out how this doesn't happen any more. i mean used to, mistakes used to happen all the time. we used to stop mistakes in individual stocks on a daily basis. if we can just figure out a market structure that prevents this kind of thing from happening. it's very unfortunate that we're in a situation where a software glitch, like a miss on a test can cause a firm to have this kind of problem. >> joe? >> let me ask you, i was part of it at the nymex exchange, how culpable are the actual exchange. back in the day i was able to take my server for $20,000 and go put it on the cme, directly or whether it was i.c.e. itself. the exchange themselves, there's culpability, isn't there? >> i don't want to say that the exchanges are culpable, but they're stuck in the market the way it is today. it's probably not all of their choice, too, sometimes and they're trying to be competitive. i personally think that it would be great to bring market makers back on a legitimate basis and
have more liquidity in the market. on a daily basis, one of the big problems is the small caps don't trade well, they've got no sponsorship. they're basically orphans out there. that's a daily problem. and if we could encourage real, legitimate market-making so there's liquidity and the small companies could grow, i think the exchange would serve a real purpose. as far as the exchange go, they have a different role. the exchange in the old days when they were physical places rather than software programs, their real role was to manage counter party risk. so if one of the members got out of hand, they would kick him out. that was a good incentive to keep your house in order. >> you've asked the question, as you've sat here now, how do we fix it going forward. how do we meld this move to high-frequency trading, which clearly has had some positive impact on the market, right? there's speed, there's bringing prices down for the individual investor. but how do you meld that with the quest for better security on
the street to make it all work together? what is the great fix? >> well that's the challenge. obviously there are advantages to electronic trading. trading, trading electrically works well, a lot of the times in a lot of stocks it doesn't work in all stocks, right. and i think if you can just take the good things that used to be in the market like what we used to have, which was part of the auction market, and incorporate those good elements into today's market, i think we'd be a lot better off. >> good to talk to you. >> thank you. >> thanks for having me. >> likele labranche. the energy etf, the industrials, stocks sitting at session highs after the better-than-expected jobs report. perhaps a different view of what the ecb's draghi actually said yesterday and certainly maybe an overall better view on where the economy may be heading. the market is certainly off to the races. the dow is enjoying the best single-day action in about a month. up next, not all social
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welcome back, shares of linkedin surging after earnings topped estimates. the stock continues to be one of the few bright spots in social media. more gains ahead, or should you take your money and run. steve weiss, i know you were very interested in this report when it came out. >> i had no view of the fundamentals, i said it's 30% down side minimally, and 5% to 10% upside. guess what happened, the shorts ran for cover and it's good. >> we talked about this being the social networking play, the first to come out in ipo. the management has best telegraphed the message to the analysts to the shareholder community since 2011. it's a name i think you can own here. do i think it's going to get back up to $120, the 52-week high, no. but a pull-back at $97.50, i'll own it there. >> do you own it now? >> quite honestly i i missed the trade. we spoke about it yesterday i pulled back, i was sitting, waiting to buy it, the clock ran out on the day and i said, darn
it, i didn't buy it and here i am now, missing it, looking for a pull-back. >> i wouldn't own it, because it's too high priced in terms of valuation and the risk-reward i'm not comfortable with. go but steve, that's the key. this is why this one is different. they're giving it a pass, because they're not even, they don't care valuation at this point what linkedin's concerned. what joe said, you have customers that want to be out of it and they're selling access for the databases, are people that want to get in, headhunters that want to get in. there's a business here of monetization which facebook can'grabt so linkedin is getting a huge pass. i agree with you, valuation is terrible. but at this one, they're not look at it until they look at it. >> it's all what you do and to me you miss by a penny, it can be a great quarter, great company and miss by a penny and the stock is down 30%. >> they don't care about valuation until they care. >> if you look at the valuation here, steve, on facebook, the stock has come down it's half, i know we had this discussion before. facebook down at 20, almost 10%
today. there is value there. i think they can find a way to monetize that business and go after linkedin's current business. i think there's upside in facebook. >> the only analogy i use i respect your opinion on facebook was, there's plenty ever things that people need and want like sirius satellite. but you look at the stock price it doesn't equate to a stock price that you would think that is a needed buy a consumer product. >> murphy, so correct me if i'm wrong here, you own facebook, don't you? >> i do not. we traded facebook going into the earnings in the weekly calls but got out of them. we don't own it now, we're waiting for the stock to bottom and get back in. >> did you miss that? >> possibly. you know, looking at this point but really scott, we're close right now to the lock-up coming on and a lot of shares coming on to the market. so with facebook, i think if the stock, when it does put in a bottom, the upside is 40, 50, 60, 80%, it's not getting this first 8%, 10%, i'd rather miss that part, know that the bottom is in. when the street stops focusing
on the negatives of facebook and focuses on the positives and the amount of users and the potential for revenue there, you know, if you put a 161 multiple on facebook like you have on linkedin, you know, you're talking about a $300 stock. >> the scary thing is you can get an 80% boost price and you're just back to the ipo price, that's the sad thing. >> let's continue the conversation. because if our next guest is correct, mike murphy may get his chance to get in on facebook. as we said, it's rising today, as we said, our next guest thinks it's going a lot lower from here. let's bring in mark holebert. the editor of "financial digest" i know you've been listening to the conversation we've just had. how low do you think facebook is going? >> i think given generous assumptions and any evaluation and calculation, think it's reasonable to come up with a price in the low teens. i mean you can come up with a slightly higher or lower number. but basically what i did with my particular back of the envelope calculation is say, okay, let's
assume that revenue growth at facebook for the next five years is equal to the average of all ipos between 1995 and 2005. that includes of course the real huge run-up in the internet bubble. i think that's a very generous assumption, since facebook came to market at a far later stage in its growth cycle than a lot of those internet companies. nonetheless, let's give them the average. that means they'll grow something like 212 percent over the next five years. that's a pretty generous assumption. let's say they can jump over that hurdle. then give them the price, the sales ratio that google currently has, which is again i think a very generous assumption and assume that the stock produces an 11% annualized return, which is more or less the market over the next five years. those are the only three data points you need, you come up with a price it should be trading around $13.80. can you say well it will grow faster than the 212% over the next five years or that it justifies a price-to-sales ratio even richer than google.
but those are the arguments you have to make in order to justify a price that is already pretty low relative to current market. >> at some point you have to make a decision, i suppose, on what a premium, you can put on potential, right? potential is what mike murphy, one of our traders just cites as a reason why this could be attractive. that takes me back to the dot-com era and bust. a lot of bets were made on the potential of things that didn't turn out to materialize. >> that's right. if you look at you know, over the last 12 months that's four quarters. facebook revenue has grown and the rate it would need to keep going for the next five years. in order to even match the average. for my assumption of the $13.85 price. >> mark let me jump in, i disagree with you, i don't own facebook. here's where i think you're off-base, you're valuing it on the average. it's not an average company. it's not what the average ipo
did, there are plenty of dogs and there are plenty of muts, some successful ones. but you have to look at what the potential facebook is. and if they do come out with a good mobile strategy, everything you said goes out the window and the stock flies. so forget about the average. it's meaningless in terms of this stock. >> well i mean, you know, in one sense, all you're saying is if you disagree with the assumption you come up with a different number and of course i would agree with you. but bear the following in mind. facebook is already a huge company, it has huge sales it came to market with a valuation of 104 billion dollars, that's already a huge company. the very high percentage growth rates that were included in the average of those, that ten-year period that i'm based this on, included a lot of smaller companies where it's a lot easier to maintain the kind of high percentage growth rate and revenue. it's going to be a huge hurdle for facebook to jump over. even to come up with a 212% growth rate and revenue over the next five years. a lot of things have to go their
way. i don't think the average is all that bad of an assumption. it's not like i'm being that harsh on them to say they hit the average when they're already a huge company. >> mark, we'll make that the last word, mark hullbert for us today. let's touch the market quickly. we're at session highs, let's get a check on where the s&p 500 currently stands right now. looking at a gain of better than 2%. nearly 29 points. the dow is having its single best day in about a month. coming up on halftime, we'll talk to energy rain-maker, floyd wilson. who is he? he started a company for $60 million and he sold it for $12.1 billion. what's his latest play? we'll talk to him about the direction of nat gas as well. i', tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab...
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welcome back, big day for stocks, take a look at the s&p 500, heat map on the wall, you'll see plenty of green on the board today, better-than-expected jobs report helping stocks. can you see nearly every stock out of the s&p 500 is in positive territory. if you were to take a look at the dow, plus 250 or thereabouts right now. best single day for the dow jones industrial average in about a month. so what is today's jobs data do
to the debate over qe 3? drew matus is senior u.s. economist for ubs. he joins us now. drew, answer that question. what's the fed thinking right now? >> i think the fed's thinking that they're glad they waited and they're going to have to see september's number before they make a decision. so once again, we're just on this perpetual roll-over of we got past this number, let's see what the next one is because there's a lot of evidence that job growth accelerated the number. they'll want to see if sustains before they decide what to do with qe. >> how does the economy look to the economists right now? >> the second half of the year not looking great. but i think too many people are focusing on the fiscal cliff for next year and it's important to focus on. but it's also important to realize it's either going to happen, and if it happens, you have a recession. or it doesn't happen. and if it doesn't happen, you can have a normal rate of growth. >> why do you say too many people are focusing on it many ceos have told us it may be the
number one factor that makes the difference for them in terms of investing, in terms of hiring. >> i would fire back that they're probably trying to figure out what the probability distribution is. and the problem is that it's 50% -- whatever it is, there's two different modes. so it's either going to happen or it doesn't happen. and trying to make a decision that in case you might as well be flipping a coin. >> joe? >> drew i guess in the near-term, the ultimate question, whether u.s. consumers get some confidence from this figure would be in retail sales, a back-to-school season coming up in the next few weeks, do you expect that this report maybe gives that more robustist? >> certainly there's good signs in the report. i know the average hourl earnings number was weak and people are pointing to that and sayings u.s. consumer can't spend money. but there was a lot more low-wage job growth and creation, which is what we need. because we have people with age job skills that need to re-enter the labor force, almost get retrained up and move on to better things again.
so that's a painful process. but the good thing about that is that those people tend to spend 100% of their income. more of the money, the income flows to those consumers and those workers is going to be used more efficiently. >> drew, thanks, good to talk to you. meantime bond yields sharply higher as investors are piling into stocks. the move could be short-lived though according to our next guest. who recently said yields were heading much lower. what does he think now? let's ask jeff killberg, the founder and ceo of killer capital. you're on the wrong side of it today, jeff, where are we going from here? >> not on the wrong side of it yet, 1.67% is my killer pivot which we've talked about. honestly i don't think we're seeing the euphoria in the equity markets being translated to the bond market. we're seeing a bigger selloff in the retail side. the tlt. if you look at last friday's judge, the low in the ten-year note, the price was 133.26.5. the tlt low price was 128.50.
you're seeing the price come down to 126.77. the arbitrage, we talk about the ar traj here in the pits in chicago all the time. playing the tlt for the long. as long as we have not seen anything substantial out of europe. at the end of the day, judge, they lead read the same book twice with two different conclusions that's why markets rupp. not that we're seeing the absolute panic selling. there is no panic selling notice bond market today yet. >> it seems clear that the market is revisiting the way that it acted after draghi's ecb press conference yesterday. it seems more that he's primed to do something substantial rather than not. >> no one wants to see him do more substantial than not than myself, judge. like you just said and to your point, we just tested the low on the ten-year price. not to settle, the price, which technicians like to look at. we bounced off of that. therefore, i think you can get into the tlt under 127.
due to the fact if germany does buckle, if they concede and we get something substantial, unlimited firepower out of there. we will see treasury yields go up and prices sell. that's the knee-jerk reaction. the next reaction is what happens to germany and the debt downgrade? where do you go in that downgrade happens? just like the counterintuitive trade we saw last august. in our own u.s. debt ceiling debacle. counterintuitive trade, they come back into the u.s. treasuries, the u.s. dollar. that's why i think the ten-year is tethered to 1.5% through the election, judge. >> i don't understand this pivot you're talking about at the top. didn't you say the last time you were on that you thought the ten-year was going down to 1.16 or 1.19? >> 1.19, i still do. it gets about 1.67, you can't fight the tape, it's a technical trade. i'm still bullish on treasuries, bottom line. >> got you, jeff gilbert. weiss, comments on yields? >> i think you're okay for the next couple of weeks. mean that yields keep going up, because draghi said in a few
weeks. coming up, energy rain-maker, floyd wilson, reveals his next big play and where energy is moving from here. [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade.
for the fed and the possibilities of more qe more easing, crunch time for knight capital. deal or no deal? we will look at what the trading glitch look at the investor confidence overall. and facebook is having a good day. but it's all relative. blue ribbon advice on what the company should do next. meantime, back to scott and more "fast half." >> thanks so much. mentioned the markets are at the highs of the days. industrials is a group leading us there. jackie deangelis has a market flash. >> looking at general electric. above $21 will be the highest intraday level since march 1st, 2011. it could be the highest level since october of twalgt. remember, ge's a moiinority own of nbcuniversal. scott? >> how could we forget that?
what's the trade on ge? >> i like it here. although it trades a little bit at a loftier price, you have a 3.3% dividend and three areas poised to move higher. industrials is ge and financials ge. ge has a move up. it hasn't seen in it a long time. >> up next, energy is surging today. we'll get the next power play from an energy rainmaker just on the other side of this short break. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter. yeah, you -- you know, everything can cost upwards of...[ whistles ]
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welcome back. few people have mastered the art of the deal in the energy industry better than floyd wilson. he's the man who created ed pe hawk and sold it. the latest play is halcon, chairman and ceo and he joins us now. great to have you on the show. >> thank you. thank you for having me. >> a couple of big finds yesterday. that's the big news lately. what do they mean for your bottom line? >> it gives us many years of development opportunities in front of us in both areas and it gives us a fast track to the growth that we're projecting in our public statements. >> your stock, we were just watching it as you were speaking moving towards the highs of the day. i guess you made no secret of what your intentions are in this whole game. you intend to grow halcon to a point to sell it. correct?
>> yes. to a point in which it will be attractive to a larger company that's looking for a large, you know, multi-decade development asset. >> so what kind of timeframe are you looking at? what can you tell shareholders? when you were last on, i think you mentioned, you know, two, three, four years. i'm wondering how the current macro economic view shapes that, how the current market view shapes that, the current nat gas view shapes that. >> yeah. you know, we're largely oil. 75% oil and natural gas liquid so we track that a little more closely. gas is very important to us. i would say it's still two or three years. things are in a bit of turmoil. there's a lot of volatility. i think everything needs to reset. meanwhile, companies like halcon look for areas to practice their trade where the development costs are low and lifting costs
are low so has to keep the margins high in almost any commodity price environment. >> some of my clients own your name. can you compare wood buying with eagleford for me? did you expect the same results, better, worse? >> well, it's all relative, of course. the best part of the eagleford is the finest oil and gas production in the united states at this moment, i believe. the best part of the wood buy will rival that that it's more shallow and maybe less expensive. more broadly oily and fairly timely. it's certainly -- it's hard to compare something a few hundred miles away but they're both excellent areas of interest for us and in particular discovering the wood bin in two different zones is very heartening. >> thanks so much for spending time with us. floyd wilson, ceo of halcon.
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